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June 9, 2010

Apple launched its latest iPhone 4 Monday and like every previous version of the device, availability in the U.S. will continue exclusively through AT&T Mobility, to the surprise of many who initially believed that other wireless carriers such as Verizon would also offer the new unit.

The news is certainly considered good for AT&T and its users.

The fact is that it makes the most financial sense for Apple to continue its relationship with AT&T Mobility for the distribution of the iPhone in the U.S.

AT&T's use of GSM-based technology allows Apple to rely on just a single device with quad-band GSM/GPRS/EDGE and tri-band HSPA support to serve virtually every country on the planet, and not just the United States.

A move to a CDMA-based carrier would require a second model that would also splinter the usability of some features due to differing network capabilities on U.S. soil.

AT&T Mobility has said repeatedly it will indeed begin offering the iPhone 4 beginning June 24 with preorders beginning on June 15.

Pricing for the device will follow Apple's already announced $199 for the 16 GB model and $299 for the 32 GB model. Following the iPhone 4 unveiling, AT&T Mobility reduced the price of its current 3 GS models from $199 to $149 for the 16 GB model and from $299 to $199 for the 32 GB model.

A new 8 GB model of the 3 GS will also be made available beginning June 24 that will sell for $99 replacing the current 3G model that sells for that price.

While there were rumors that Apple would expand access to the device beyond the nation's No. 2 operator, that time has not come yet.

Apple's CEO Steve Jobs hinted at a recent technology conference that expanding the availability of the device could happen in the future, while many industry observers have claimed that AT&T Mobility has an exclusivity agreement in place that lasts through the middle of 2011.

There were also a few screams from the audience during the iPhone 4 unveiling of Verizon when one of Jobs' demos of a streaming service ran into network difficulties. Jobs quickly corrected the person that the device was actually running data traffic through the hotel's Wi-Fi network, and not Verizon's.

The pricing for the new devices factors in a $400 subsidy provided by AT&T Mobility, according to pricing provided by the wireless carrier for both subsidized and unsubsidized iPhones.

AT&T recently increased the ETF (early termination fee) it charges for customers purchasing a smartphone that then decide to break their contract before the agreement expires. The new ETF fees begin at $325 before a prorating cuts another $10 a month off the total fee.

The previous ETF for all of the carrier's devices was $175.

AT&T also followed previous precedent by amending its upgrade policy for current iPhone users that allows them to take advantage of upgrade pricing up to six months early, if they agree to sign a new two-year contract.

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Source: AT&T Mobility.